The major components of the 2011-12 supplementary estimates (B) include net new appropriations of $53.4 million. The most significant items include: $33.3 million to support the Interim Federal Health Program; $11.7 million to continue work on the inclusion of biometrics in the temporary visa stream—this is a project we started two years ago that will come into effect in 2013; and $9.5 million to continue to modernize the immigration system and manage backlogs. This is of course the subject of your current study.

As you know, in 2008 we introduced the action plan for faster immigration, which gives the minister of citizenship and immigration the ability to control the number and type of new applications we receive. Under the action plan we can now focus our efforts in the federal skilled worker category on bringing in people with the skills who are most likely to succeed in Canada. Those applying as federal skilled workers must now have experience in one of the 29 identified in-demand occupations and have an arranged offer of employment, or, as we announced earlier this month, must have studied at the PhD level in Canada.

The new PhD initiative, together with the Canadian experience class that we launched in 2008, represents what we hope is the future of immigration to Canada: typically bright young people who have Canadian education or work experience that will be recognized by Canadian employers, and who have improved or perfected their English or French language skills. Such newcomers are set for success in Canada.

We've also capped, at 10,000 per year, the number of new applications we will accept in the federal skilled worker program, to help further reduce the backlog of federal skilled workers.

As I explained at my last appearance, and as you can see on the charts to the side here, the controls we introduced in 2008 to manage the intake of new federal skilled worker applications have helped to reduce the backlog very significantly. We've reduced the backlog of 640,000 people by more than 50%.

While we are making progress on the federal skilled worker program, clearly there are other stresses in the system. In the parents and grandparents category, for example, there are currently about 165,000 people with their applications in process. That is why earlier this month we announced the first phase of the action plan for faster family reunification.

The four points in phase 1 of our action plan have three ultimate goals: reduce the backlog; speed up processing times; and make it easier for parents and grandparents to visit.

First, we will increase the number of parents and grandparents admitted to Canada by 60%, from an operational target of just over 15,000 this year to 25,000 next year. This will be the highest number of parents and grandparents admitted to Canada in nearly two decades.

Second, as of December 1, parents and grandparents will be eligible for a new 10-year, multiple-entry parent and grandparent super visa. Under this visa, they will be able to stay for up to two years at a time, without the need to renew their temporary resident status. The new super visa will also ensure that parents and grandparents can come to Canada sooner. They will now be able to visit with families in Canada, in principle—we hope, in many cases—in eight weeks, instead of waiting the current average time of eight years for permanent residency applications to be processed. They will also be required to obtain and demonstrate to us that they have acquired health care insurance for their visit to Canada, to help protect the interests of Canadian taxpayers during their visit. This will help us to ensure the integrity of this program.

Third, starting in the new year, the government will consult widely on how to redesign the parents and grandparents program in the future so that it is sustainable over the long term. Of course, the findings of the committee study on backlogs will factor heavily into informing our consultations. I mean that sincerely. We do hope that your report will delve into the issue of how we can eliminate these long backlogs and manage these programs in a more responsible and sustainable way in the future.

In order for this program to be sustainable, it must be redesigned to avoid future backlogs. I made this point at my last presentation, Chair. The problem on this is a simple one. It's a question of math. When applications exceed admissions, over time we end up with growing backlogs and longer wait times. When admissions exceed applications, the backlog and wait times shrink. It's a question of math. The problem is that we've been receiving on average up to 40,000—in some years up to 50,000—applications for parents and grandparents per year, far beyond our ability to admit that many people. So the Government of Canada has been, I would argue, a little bit disingenuous, making promises that we could not keep. I think all of us, regardless of our party orientation or philosophical approach, could agree that we must do a much better job of only accepting roughly the number of applications relative to the number of people who we are able to admit. The question is, how do you do that?

The parents and grandparents program must also be sensitive to our fiscal constraints, obviously, such as our generous public health care system and other social benefits. We will need to ensure that we admit a number of grandparents and parents whose families can afford to support them.

I have therefore asked my officials to look at how we can better manage this program, and right now we're examining a range of options.

Some of these include proposals already raised during the committee's study on backlogs.

For example, in order to reduce the number of applications, we could perhaps look at changing the requirement for sponsorship. One way we could do this would be to increase the minimum income threshold for sponsors, or increase the length of time a sponsor must meet that threshold. This would ensure that sponsors are well settled and have the ongoing financial ability to support family members, or we could adopt an approach similar to that of Australia, which is known as the “balance of family” test. This option would prioritize parents or grandparents who already have the majority of their children living permanently in Canada.

Another suggestion I've heard, I think perhaps at this committee, is prioritizing applications for widowed parents or grandparents who have no immediate family in their country of origin and for whom one could make a stronger humanitarian case for reunification.

To reduce the fiscal burden of parents and grandparents on our generous social services and health care system, another option could involve requiring sponsors to cover their health care costs through an upfront bond. I believe that immigrant lawyer Richard Kurland suggested such a tool at this committee.

We intend to make all the options publicly available once my officials have compiled a list, before our consultations begin, in early 2012.

There will be lots of opportunity for Canadians to state their opinions and weigh in on this debate.

The fourth and final point in phase one of our action plan is a temporary pause of up to 24 months on the acceptance of new sponsorship applications in this category. A temporary pause will enable us to bring down the backlog until wait times are shorter and more reasonable. This part of our plan is absolutely essential. If we were to leave the program open for applications during this period of consultation and redesign, there's no doubt, based on previous experience, that our system would be flooded with new applications and the backlog would go from 165,000 to over 200,000. In fact, as you know, we've estimated, based on current trends and not taking such measures, we would be looking at a backlog of 340,000, I believe, with a 20-year wait time by the end of the decade. It's our hope that within the next two years we will be able to cut the backlog of parents and grandparents applications roughly in half, to a more manageable size.

Phase two of our action plan will take place after our consultations to redesign the program. Our vision for phase two is a more efficient immigration system. The end result will be faster family reunification and a program that is sustainable over the long term.

Mr. Chairman, once newcomers arrive here in Canada, our priority is to help them integrate as quickly as possible. That's why we've tripled the settlement funding since 2006, making more services like language training available to newcomers.

The government has placed a renewed focus on integration of immigrants into Canadian society. We believe that in order to succeed in Canada, you need to speak either English or French. You need to know about Canadian culture and Canadian history.

While we are committed to helping newcomers succeed, the government must also manage tax dollars responsibly. As this committee is aware, we are engaged in a review across the government in order to reduce spending and balance the budget, as we are at CIC. For 2011-12, funding for settlement services in provinces and territories outside of Quebec was reduced by $53 million. In 2012-13 it will be reduced by $6 million, for a total reduction of $59 million. But even after those reductions, the total spending outside of Quebec will be $600 million, three times more than the $200 million allocation in 2005.

To advance fairness and meet settlement needs across Canada, starting next year allocations for all jurisdictions outside Quebec will be determined using a new national settlement formula. This formula is based on the number of immigrants that each province and territory receives, and it gives additional weight for refugees. This will ensure equal and fair funding across the country, with the exception of Quebec, which has a separate formula because of their accord.

Chairman, the Government of Canada is committed to helping new immigrants and their families succeed. We believe that funding for settlement services must follow immigrants so that services make their way into the communities where they settle.

The 2012 settlement allocations will continue to build on this trend and distribute funding more fairly across the country. I should note that in the last five years we have seen a significant change in settlement patterns: a decline in the number of immigrants settling in Ontario, particularly in Toronto, and a large increase in the west, particularly in the Prairie provinces.

Mr. Chair, my officials and I are now prepared to answer any questions the committee may have.

And thank you, Minister, for your very precise explanation of the changes that you're envisioning.

Many of your proposed changes have already been announced and phased in over the past couple of weeks or so. Could you give the committee a feel of what the response has been from the public with respect to these changes, the action plan for faster family reunification, please?

To be honest, I've been very pleasantly surprised with an extraordinarily positive response.

One thing I've learned in this job is not to underestimate the understanding new Canadians have of our immigration system. They understand we don't have the capacity to welcome everyone who wants to come to Canada, and certainly not everyone right away. They understand there are practical limits, even though we're maintaining the highest levels of immigration in Canadian history on a sustained basis, and the highest per capita in the developed world.

I have done dozens of radio talk shows, town hall meetings, and round tables since this announcement three weeks ago. The response that I've received has been that people appreciate this initiative because (a) it will substantially reduce the backlog in wait times for those currently in the parents' queue, and (b), it will increase the ability of parents and grandparents to visit their loved ones.

What many new Canadians tell me is that their elderly relatives—their parents and grandparents—don't necessarily want to immigrate permanently to Canada. They are well established in their country of origin where they have other family and friends. Many of them simply want to come to Canada on extended visits to perhaps help their children with childbirth, for example. The new super visa will help them to do so.

The second question I have is with regard to the reduction of the backlog for parents and grandparents. I have also engaged my community in Willowdale, which has an over 65% visible minority, and probably more than 50% were born outside of Canada. I have a feeling there's a request that the sponsor should show some sort of engagement in our community by taking this one step higher. Only citizens can apply for their parents and grandparents.

What I would say, Mr. Chairman, is that we need to find tools to make the management of this program sustainable in the long run so we don't end up with a massive excess of applications over admissions. The task for this committee, and ultimately for me as minister, is to find a balanced and reasonable way of limiting future applications to the number of people we are able to admit. I don't think we should rule anything in or out. We should look at all possible options. In one of our peer countries the privilege of family sponsorship is limited to citizens. You may want to ask the researchers to look at that. We'll certainly be looking at all of those options.

My last question has to do with more of a philosophical approach to immigration. Traditionally, immigration was tied to the nation's need for manpower, growth, and so on. I trust your department has looked into this and how we tailor our immigration for that purpose. For the future of Canada, for what we are doing here right now, we're looking at the challenges of the 21st century. Do you still feel that is an applicable strategy for our national immigration policy?

Yes, absolutely. This is why I say unapologetically that the focus of our immigration program must be on Canada's prosperity. Within that context, of course, we must continue our openness to family reunification and refugee protection, but the emphasis must be on prosperity, because of our aging population and our shrinking workforce.

I think one thing that's different now from the early decades of the last century, with high levels of immigration, is that we were really focusing then on settling virgin territory. We were farmers and people with basic skills. In today's highly competitive global economy, where value is often added by people with higher levels of education, I think we need to focus—not exclusively, but focus—on those newcomers who bring the skills that are most likely to succeed in the Canadian economy.

The new PhD program that we just announced was based not on some guess but on the data, which tell us, for example, that foreign-born, Canadian-educated PhD students do much better in Canada than most other newcomers. It is not entirely surprising.

Having said that, I do think that in the future we need a more flexible immigration program. We've made it more flexible through the large expansion in the provincial nominee program, which does allow, for example, skilled tradespeople to come into Canada and go to those regions where there are labour shortages. We've made it more flexible through the creation of the Canadian experience class, and next year we intend to make it more flexible through reforms to the skilled worker program, to put more emphasis on those traits that our data say lead to faster economic success in Canada for immigrants, such as people with arranged employment offers, people with higher levels of language proficiency, and people with Canadian work experience. But one thing that we're also contemplating is a skilled trades stream, so that people who would not normally qualify for the points system, which places a great emphasis on higher education, would still be able to immigrate through our skilled worker program.

So I think grosso modo, yes, we should.

Finally, frankly, one of the problems we've had in our immigration system is that about two-thirds of the people who obtain permanent residency in Canada are not primary economic immigrants. Either they're dependants, they're subsequently sponsored relatives, they're humanitarian refugees, or they're other humanitarian permanent residents. Only two out of every ten are actually assessed for their human capital before coming to Canada.

I'd like to thank the minister for being here today. The minister has a reputation for being very accessible, and I'd like to thank him for that.

Mr. Minister, we've had a number of witnesses testify before this committee. We had the Canadian Restaurant Association come and tell us:

We face significant labour shortages by 2025, with over 142,000 full-time jobs projected to go unfilled. Thirty per cent of our members are concerned about labour shortages right now.

We met the other night with the Canadian Association of Petroleum Producers, and they told us that they clearly face serious shortages of workers, particularly in the skilled trades.

We know demographically that the number of Canadians over the age of 60 is projected to go from one in five today to one in three by 2020.

A 2009 study by the C.D. Howe Institute concludes that we would need an improbably large increase—and that's something we're suggesting—from the 2010 level of 0.8% to almost 4% just to stabilize Canada's current old age dependency ratio.

Of course, CIC, itself, has said:

Very soon, the number of new entrants from Canadian schools and universities will equal (or fall short of) the number of retirees, leaving immigration responsible for all labour force growth.

Mr. Minister, we know that you've kept the annual levels flat over the last five years, at 254,000. If we keep our annual average the same, as you've announced, as the previous five years, how do you foresee Canada dealing with our looming demographic changes and upcoming labour shortages?

First of all, just to correct you, we, as a government, haven't kept levels flat. The average level of admissions of permanent residents under the previous government, from 1993 to 2005, was 222,500. Since our government has come to office, in the past five years the average number of admissions has been 254,000. That represents an increase of 14% in admissions, the highest sustained level in Canadian history. Although there were a couple of abhorrent post-war years that were higher, it's the highest sustained level. It also represents the highest per capita level in the developed world.

Now, Mr. Davies, I agree with you. I think you make a very good point, that we are facing a problem with future labour shortages. That's why we need immigration. But as I've pointed out before, immigration in and of itself is not a solution to those problems. According to the C.D. Howe Institute and other reports, our merely maintaining the average age of our population through immigration increases would require quadrupling levels to about 4% of the population per annum. That would be well over a million immigrants per year right now.

Some people might want to make a case for that. I think that's completely unrealistic.

I realize that when I said flat, I meant over the previous five years. Since you've been in government, you've increased it, I agree, over the previous Liberal numbers, from approximately 220,000 to 254,000. You've filed your 2012 labour or projected levels plan, and that plan is what proposes to keep it steady at the 254,000 mark.

I'm just wondering why your government saw fit to raise the levels over the last five years from the previous Liberal number of 220,000. What was your reasoning for raising that 14%?

There were two reasons. First, we do see immigration as a tool to address labour shortages. Second, we've accommodated significant growth in the provincial nominee program, which has led to a better distribution of immigrants across the country and through which immigrants are getting very good initial economic results. A third reason was frankly to help us reduce the big backlogs that we inherited. Last year, for example, we decided to add another 10,000 admissions for the federal skilled worker program to draw down on that backlog. On further reflection, I don't think we should allow levels to be established by mistakes of the past. I don't think we should be artificially raising levels just for backlog reduction purposes.

Finally, Mr. Davies, I think the challenge here is that as we look at the economy, to state the obvious, we're living in a period of real uncertainty. We can see what's going on in Europe today, as we speak. We see a softening in the labour market in parts of Canada.

Here's the challenge: the restaurant association with whom you were speaking and the oil and gas producers have very acute labour shortages in their industries, particularly in the prairie provinces and northern British Columbia. But in central Canada and in parts of eastern Canada, we see the opposite problem. We see far more people who are unemployed. So we have to be very careful and very prudent.

With respect, I believe your suggestion to go to 1%—so to 340,000—and to give permanent residency to all temporary foreign workers, which would mean another 140,000 net for those who have access to permanent residency, would take us up to close to half a million--

Let me clarify, because that's not what we said. We said to raise the annual levels prudently over the next five years to approaching 1%, and within that global number to allow temporary foreign workers to apply for citizenship. Obviously if the annual level is, say, 310,000 or 320,000 permanent residents and you allow temporary foreign workers to apply, it's not in addition to that, Mr. Minister. It's within that number. That's just to clarify, if you've been adding the two numbers together.

Mr. Minister, when one keeps in mind that the total annual immigration levels are being kept constant next year, which you've done, but you've raised the number of visas in certain categories, then obviously there must be reductions in others. One witness before this committee said we have to realize that with the target level we've established, immigration is essentially a zero-sum game, and that if we process more in one category we have to process less in another.

In the previous two weeks you announced that annual levels would be kept flat and that next year's target would be 254,000. There would be 10,000 more visas for skilled workers; 10,000 for parents or grandparents; and 1,000 more visas for a special program for PhDs. So if you have increased visas by at least 21,000 in these areas, where will the reductions be?